Poverty, misrule, Army - Pakistan's disaster

Agencies
January 11, 2019

London, Jan 11: The continued persistence of poverty, instability and maladministration fostered by the Pakistan Army, coupled with the presence of nuclear weapons and the large presence of religious zealots, is not only a disaster for Pakistan itself but also poses a grave danger for the entire world.

The powerful Pakistan Army, which has on occasions, overthrown democratically elected civilian governments, has always wielded considerable power in the matters of the country's internal affairs and its foreign policy.

According to The Economist, an English-language weekly magazine-format newspaper, Pakistan Army has not only defended the state ideology but it has defined it in two destructive ways since the country got created in 1947.

"The country exists to safeguard Islam, not a tolerant, prosperous citizenry. And the army, believing the country to be surrounded by enemies, promotes a doctrine of persecution and paranoia," the article stated.

Underlining the alarming effects, the piece elaborated, "Religiosity has bred extremism that at times has looked like tearing Pakistan apart. The state-backed those who took up arms in the name of Islam. Although they initially waged war on Pakistan's perceived enemies, before long they began to wreak havoc at home. Some 60,000 Pakistanis have died at the hands of militants, most of whom come under the Tehreek-e-Taliban Pakistan (TTP)."

Although the Army took action against the Pakistan Taliban following the Peshawar school massacre in 2014, "yet even today it shelters violent groups it finds useful." This is evident where Hafiz Saeed, the mastermind of the 26/11 Mumbai attacks, is roaming unharmed in the country.

Also, some leaders from the Afghan Taliban resides in Quetta, the capital of strife-torn Balochistan province.

"Melding religion and state has other costs, including the harsh suppression of local identities. Religious minorities, such as the Ahmadis, are cruelly persecuted. As for the paranoia, the army is no more the state's glorious guardian than India is the implacable foe. Of the four wars between the two countries, all of which Pakistan lost, India launched only one, in 1971-to put an end to the genocide Pakistan was unleashing in what became Bangladesh. Even if politicking before a coming general election obscures it, development interests India more than picking fights," The Economist article said.

"The paranoid doctrine helps the armed forces commandeer resources. More money goes to them than on development. Worse, it has bred a habit of geopolitical blackmail: help us financially or we might add to your perils in a very dangerous part of the world. This is at the root of Pakistan's addiction to aid, despite its prickly nationalism," it added.

For instance, China is constructing roads, railways, power plants and ports by investing over USD 60 billion under the China-Pakistan Economic Corridor (CPEC) project.

"The fantasy that, without other transformations, prosperity can be brought in from outside is underscored by CPEC's transport links. Without an opening to India, they will never fulfil their potential," said the piece.

Such is the situation that over 20 million children cannot go to school due to financial difficulties and less than 30 per cent of women are employed in Pakistan. Moreover, in the last 20 years, exports have grown at a fifth of the rate than India and Bangladesh.

The current Prime Minister of Pakistan Imran Khan has admitted the half of the problems the country is facing. Right now, his government is engaging with the International Monetary Fund (IMF) for a comprehensive bailout to thwart the balance-of-payments crisis.

The piece articulates that the Imran Khan-led government can improve the gloomy picture of Pakistan by taking strong actions against tax evasion, promoting independence to the monetary authority and unify the official and black-market exchange rates. It should also take steps to integrate the country's economy with the world in an aim to spur growth and development, The Economist reported.

However, there are challenges stating that "transformation depends on Pakistan doing away with the state's twin props of religion and paranoia and with them the army's power."

"Khan is not obviously the catalyst for radical change. But he must recognise the problem. He has made a start by standing up to demagogues baying for the death of Asiya Bibi, a Christian labourer falsely accused of blasphemy," the article said.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
April 11,2024

vietnamfraud.jpg

Real estate tycoon Truong My Lan was sentenced Thursday to death by a court in Ho Chi Minh city in southern Vietnam in the country's largest financial fraud case ever, state media Thanh Nien said.

It's a rare verdict - she is one of very few women in Vietnam to be sentenced to death for a white collar crime, i.e. looting one of the country's largest banks over a period of 11 years.

The decision is a reflection of the dizzying scale of the fraud. Truong My Lan was convicted of taking out $44bn (£35bn) in loans from the Saigon Commercial Bank. The verdict requires her to return $27bn, a sum prosecutors said may never be recovered. Some believe the death penalty is the court's way of trying to encourage her to return some of the missing billions.

The habitually secretive communist authorities were uncharacteristically forthright about this case, going into minute detail for the media. They said 2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved.

The evidence was in 104 boxes weighing a total of six tonnes. Eighty-five defendants were tried with Truong My Lan, who denied the charges.

"There has never been a show trial like this, I think, in the communist era," says David Brown, a retired US state department official with long experience in Vietnam. "There has certainly been nothing on this scale."

The trial was the most dramatic chapter so far in the "Blazing Furnaces" anti-corruption campaign led by the Communist Party Secretary-General, Nguyen Phu Trong.

A conservative ideologue steeped in Marxist theory, Nguyen Phu Trong believes that popular anger over untamed corruption poses an existential threat to the Communist Party's monopoly on power. He began the campaign in earnest in 2016 after out-manoeuvring the then pro-business prime minister to retain the top job in the party.

 The campaign has seen two presidents and two deputy prime ministers forced to resign, and hundreds of officials disciplined or jailed. Now one of the country's richest women has joined their ranks.

Truong My Lan comes from a Sino-Vietnamese family in Ho Chi Minh City, formerly Saigon. It has long been the commercial engine of the Vietnamese economy, dating well back to its days as the anti-communist capital of South Vietnam, with a large, ethnic Chinese community.

She started as a market stall vendor, selling cosmetics with her mother, but began buying land and property after the Communist Party ushered in a period of economic reform, known as Doi Moi, in 1986. By the 1990s, she owned a large portfolio of hotels and restaurants.

Although Vietnam is best known outside the country for its fast-growing manufacturing sector, as an alternative supply chain to China, most wealthy Vietnamese made their money developing and speculating in property.

All land is officially state-owned. Getting access to it often relies on personal relationships with state officials. Corruption escalated as the economy grew, and became endemic.

By 2011, Truong My Lan was a well-known business figure in Ho Chi Minh City, and she was allowed to arrange the merger of three smaller, cash-strapped banks into a larger entity: Saigon Commercial Bank.

Vietnamese law prohibits any individual from holding more than 5% of the shares in any bank. But prosecutors say that through hundreds of shell companies and people acting as her proxies, Truong My Lan actually owned more than 90% of Saigon Commercial.

They accused her of using that power to appoint her own people as managers, and then ordering them to approve hundreds of loans to the network of shell companies she controlled.

The amounts taken out are staggering. Her loans made up 93% of all the bank's lending.

According to prosecutors, over a period of three years from February 2019, she ordered her driver to withdraw 108 trillion Vietnamese dong, more than $4bn (£2.3bn) in cash from the bank, and store it in her basement.

That much cash, even if all of it was in Vietnam's largest denomination banknotes, would weigh two tonnes.

She was also accused of bribing generously to ensure her loans were never scrutinised. One of those who was tried used to be a chief inspector at the central bank, who was accused of accepting a $5m bribe.

The mass of officially sanctioned publicity about the case channelled public anger over corruption against Truong My Lan, whose fatigued, unmade-up appearance in court was in stark contrast to the glamorous publicity photos people had seen of her in the past.

But questions are also being asked about why she was able to keep on with the alleged fraud for so long.

"I am puzzled," says Le Hong Hiep who runs the Vietnam Studies Programme at the ISEAS - Yusof Ishak Institute in Singapore.

"Because it wasn't a secret. It was well known in the market that Truong My Lan and her Van Thinh Phat group were using SCB as their own piggy bank to fund the mass acquisition of real estate in the most prime locations.

"It was obvious that she had to get the money from somewhere. But then it is such a common practice. SCB is not the only bank that is used like this. So perhaps the government lost sight because there are so many similar cases in the market."

David Brown believes she was protected by powerful figures who have dominated business and politics in Ho Chi Minh City for decades. And he sees a bigger factor in play in the way this trial is being run: a bid to reassert the authority of the Communist Party over the free-wheeling business culture of the south.

"What Nguyen Phu Trong and his allies in the party are trying to do is to regain control of Saigon, or at least stop it from slipping away.

"Up until 2016 the party in Hanoi pretty much let this Sino-Vietnamese mafia run the place. They would make all the right noises that local communist leaders are supposed to make, but at the same time they were milking the city for a substantial cut of the money that was being made down there."

At 79 years old, party chief Nguyen Phu Trong is in shaky health, and will almost certainly have to retire at the next Communist Party Congress in 2026, when new leaders will be chosen.

He has been one of the longest-serving and most consequential secretary-generals, restoring the authority of the party's conservative wing to a level not seen since the reforms of the 1980s. He clearly does not want to risk permitting enough openness to undermine the party's hold on political power.

But he is trapped in a contradiction. Under his leadership the party has set an ambitious goal of reaching rich country status by 2045, with a technology and knowledge-based economy. This is what is driving the ever-closer partnership with the United States.

Yet faster growth in Vietnam almost inevitably means more corruption. Fight corruption too much, and you risk extinguishing a lot of economic activity. Already there are complaints that bureaucracy has slowed down, as officials shy away from decisions which might implicate them in a corruption case.

"That's the paradox," says Le Hong Hiep. "Their growth model has been reliant on corrupt practices for so long. Corruption has been the grease that that kept the machinery working. If they stop the grease, things may not work any more."

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.